Documenting Business Expenses – Part 3: Travel
Travel expenses can be deducted when they satisfy a legitimate business purpose and meet the ordinary and necessary test.
Legitimate Business Purposes
The type of business you are in makes a difference. Here is a short list of purposes that may be ordinary and necessary in your business.
1) Meeting with existing and potential customers, suppliers or other business contacts
2) Continuing education, association meetings, conferences, trade shows and other trade activities
3) Meeting to discuss potential investment deals
4) Speaking engagements
5) Attending shareholder meetings
6) Meeting the publisher of your book
7) Taking photos for your marketing pieces
Documenting your Travel
You will want to keep copies of receipts, but I generally will keep a file as well. In the file I keep copies of meeting outlines, agenda lists, notes, a log of hotel, rental car, meals and entertainment used during the trip.
I use this file also to help me decide if this trip might be worth doing again.
Supporting Evidence
You also will need to keep documentary evidence of these business meals and entertainment expenses. Adequate receipts include:
- Canceled checks
- Credit card slip
- Cash register receipts
- Credit card statements
More information on the IRS website
http://www.irs.gov/newsroom/article/0,,id=167363,00.html
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